I am behind on one of my store credit cards and I received a letter from them offering to reduce my balance by 30% if I agree to make 6 monthly payments to pay off the account. I can make the payments they suggested but I have a question about one of the statements on the offer. It says "Your account will be reported to the credit bureaus as "Account legally paid in full for less than the full balance".
What does that do to your credit score and the ability to get credit in the future....
I would like to make this kind of arrangement with some other creditors but I want to know how this will effect me later.
I am not worried about the immediate future since I am behind anyway and my score is not the best but I am thinking a couple of years down the road.
By signing up a debt counseling session, your provided details (Name, Email ID and Phone No.) will be forwarded to the company advertising on the DebtCC. However, you have no obligation to use their services.
Some creditors and collection agencies refuse to lower the payoff amount, interest rate, and fees owed by the consumer.
Creditors/collection agencies can make collection calls and file lawsuits against the consumers represented by the debt relief companies.
Debt relief services may have a negative impact on the consumer's creditworthiness and his overall debt amount may increase due to the accumulation of extra fees.
The amount which the consumer saves with the use of debt relief services can be regarded as taxable income.